That's not really how it works. The Mac Pro is a continuing investment. They have to market, they have to do software support, they have to stock it, they have to dedicate manufacturing resources for it.
Yes, that really is how it works. The above somehow ignores that the Mac Pros sold at their current pricing are profitable. If they continue to sell over the next 4-6 months at those prices even in decreasing numbers they are still profitable. Those profits will pay off much of the costs you are outlining with enough left over to have effectively zero impact on Apple's (and likely the whole Mac divisions) operating margins.
The software support is present whether you sell Mac Pros or not. Mac OS X 10.8 , 10.9 , and probably 10.10 are already penciled in for the Mac Pro where they stop selling now or 6 months from now. If anything it is easier to cover that already committed to cost earlier if continue to sell the box a bit longer.
You can't just make an initial investment and call the rest pure profit.
That's not what I said. I was stating the ongoing costs are relatively low for a product. Milking a cash cow costs money, but the margins generally are high; not maximal .
I kind of agree with this... The problem is I think the Mac Pro has hit a coasting wall. With Thunderbolt and Sandy Bridge, Apple has to make tough choices and can't coast.
Of course they can over the short term. TB won't hit full stride until about a year from now. The number of SB machines that will get bough over the next 4 months is relatively small.
The core issue is that for the following to scenarios.
Scenario 1 : wait for all of new major components to become available in volume and then ship.
outside observables : no announcements. product sold at current pricing
Scenario 2 : decide late 2011 to cancel June/July 2012 with a 3 month "window for folks to do last set of acquisitions" and adjust supply chain accordingy.
outside observables: no announcement till June/July. Product sold at current pricing.
There is no difference from the outside. No announcement doesn't put you in Scenario 1 with much higher probability. They didn't have to cancel earlier. There is no huge driver to announce that.
In addition, there is a "why do we care?" attitude. Every engineer, qa person, software developer, and salesman supporting a $7k Mac Pro for a small audience is a person that could be elsewhere in the company. *cough*iOS*cough*iPhone*cough*iPad*cough*
It isn't about iOS. There are numerous Mac models variants that Apple could work on that can potentially achieve higher growth. Note that the rest of Mac line up has had double digit growth. There is zero need to look at iOS devices for other projects that could sustain Mac growth for those engineers.
Quite frankly, if the Mac Pro keeps loosing users, it's not sustainable. And if the price keeps pushing up, it's going to lose users.
A completely moot point if Apple has already decided to terminate the Mac Pro. termination means the number of users buying is going to drop to zero. That the number is dropping is one of, if not the primary, reason the model would get dropped. A strategy that were that number gently drops to zero, is fine if that is the chosen direction.
There is no step function to the number of buyers here. The number isn't going to instantanously drop to zero once HP/Dell/Lenovo/etc start shipping. It will be lower but not zero.
This is more so at odds with the scenario where coming out with a new direct replacement model. The problem is that some issues ( parts, driver, and/or software available is the primary blocker) that run contrary to the strategy. Not really a big issue over a 3-4 year horizon. It is OK to drop into local minimums as long as get to higher maximums later. Apple has enough cash coming in and stashed away that riding out a local bump in the road is nothing to panic over to throw long standing (and successful) corporate policy out the window for some short term, transient gain.
Understood. But the key question is: Does Apple care?
It has nothing to do with care and much to do with running a business that is trying to track profitable and growing markets.
. But if Apple lost the users looking for a 12 core machine, is that going to really matter to them?
It does if there are a substantive application software base that takes advantage of 12 core machines. If a large number of app vendors are not going to write such apps then ..... no it really doesn't matter because they is little to no value proposition in selling a 12 core box. If there is a high value proposition to a growing market then yes it is going to matter.
It's a matter of triage. Either you lose the lower end users who are mad about shifting Xeon prices and are going for i7 towers, or you lose 12 core users to Windows. Who do you think makes Apple more money?
Apple left the 'discount mini-tower' folks behind many years ago. Between cutting off the "entry to mid range Mac Pro" and "everyone else in Mac Pro mid-upper single + dual", I strongly suspect that the latter, not the former, actually make Apple more money. A dual package box with a single E5 could snare fair large percentage of the upper half of the single package users if priced well.
It is chasing after the "GHz" junkies that is the highly questionable market for the Mac Pro. That has a high fraction of those "I'd rather have an overclocked mini-tower anyway" folks who really aren't highly aligned Mac Pro customers in the first place.
Apple can make a much higher fraction of them happier with E5 1620's ( lowest price , high GHz ) option. But if they won't find value in that I can't see perverting the whole line up to make them happy. Those left are just primarily interested in inflecting collateral damage on the iMacs and minis.
Software that is grossly single threaded constrained is not the future of the Mac Pro. If Apple cuts those folks loose I think that is better move rather than betting the farm on them. There is far more differentiation Apple can do with a dual package box from the rest of the Mac line up Apple can do that just with the single one. Apple can fill the price gap with a "pro" iMac. ( high gamut screen , better cooling , perhaps Xeon E3 with full 20 PCI-e lanes for better TB throughput and better accesibiity like HP Z1 ) .
Ideally they could do both an i7 tower and a DP Xeon tower but I just don't see that in the cards.
An i7 tower doesn't buy them anything.
If they use i7 3900 series it will cost just as much and arrive with approximate same update rate since those chips are coupled to the Xeon E5 release cycle.
If they use mainstream i7 chips then folks will either howl that should be priced to maximally cannibalize the iMac or wail about even higher Apple tax if price segmented above the iMacs. Neither, one of those does Apple much good.
Xeon E3 would put them on the mainstream i7 update cycle if that is what primarily worried about and with easy integration with Thunderbolt design constraints. They have to limbo very close to iMac price zone though (if not $100-200 into it.) .
Dual E5's have two big upsides in aligning with rest of Mac line up.
First, it makes it much easier to embedd a GPU onto the motherboard even if Xeon E5's don't do that in the immediate future. It makes putting TB on the Mac Pro as straight forward as an iMac. In fact could use same componets. In a two package set up there are plenty of PCI-e lanes to go around. ( A version sold with one CPU socket open would be an odd ball that would loose the capability, but that's OK).
Second, again related to the PCI-e lane budget, it makes for a better high computational PCI-e box. Multiple 16x PCI-e cards with plenty lanes left over for 10GbE , TB , and high throughput SATA.
If Apple kills the Mac Pro and doesn't have a replacement tower, I don't think there is going to be a workstation iMac. The existing lines are going to be what we get.
That's because you don't want to kill off the low end single package model. If they do then there is room for one.
I think the Mac Pro market is a market Apple would like to continue to be a part of, but unlike HP, they built their entire tower market on the Xeon, and it's biting them in the ass.
HP with their 5% margin is better off with Macs with their 30% margin. Apple go bit in the ass??? Really? On what significant business metric?
If some customers are piling into a low margin business there is no good reason for Apple to blindly chase after them. It isn't helping HP's PC division to do that. In fact, they almost go spun out purely because their cross line-up margins are so low.
The Apple of today just doesn't have the attention span for that sort of multi tower market, profits aside. Something is going to give somewhere.
It isn't attention span as much as growth. If Apple hits the wall on expanding the Mac market share perhaps they will reverse course. For the moment dropping the Mac Pro probably wouldn't drop Apple out of high single or even double digit growth.
